Life insurance is a common issue addressed in a substantial proportion of divorces. For many clients, especially those of greater economic means, existing insurance coverage is owned by irrevocable life insurance trusts ('ILIT').
The Role of Existing Insurance Trusts in Divorce
Life insurance is a common issue addressed in a substantial proportion of divorces. For many clients, especially those of greater economic means, existing insurance coverage is owned by irrevocable life insurance trusts ('ILIT'). Existing ILIT arrangements too often receive inadequate attention during the course of a divorce as a result of the focus on other more significant issues, or the presumption that since the ILIT is 'irrevocable,' it cannot be tailored to address the post-divorce insurance needs. This can be a considerable mistake. In many cases, because it is assumed that an existing ILIT cannot be changed, the insurance requirements resulting from the divorce are separately addressed in a property settlement agreement ('PSA').
By
Martin M. ShenkmanThis premium content is locked for LawJournalNewsletters subscribers only
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